Many parents aspire to send their children abroad for higher studies. However, studying overseas is an expensive affair. That’s where education loans can be helpful, providing much-needed financial support to families, enabling their children to realise their dream. If you’re preparing to enrol in a university abroad this August or September, now is the time to start evaluating lenders for an education loan. Look for banks and financial institutions offering competitive rates, flexible repayment terms, and moratorium benefits. Also understand the taxation and repayment clauses of the loan to know your liability. A well-chosen loan can ease your family’s financial burden and set you up for success. The first part of the process is to apply for the loan. To build a strong application, here are some things you can do.’ Maintain a healthy credit score Story continues below this ad A strong credit score is key to securing an overseas education loan. Lenders rely on the co-applicant’s credit history—typically a parent—to assess repayment capacity. A credit score of 750 or above improves your approval chances, helping you negotiate better rates. To boost creditworthiness, ensure EMIs and credit card dues are paid on time, avoid new unsecured loans, and check your credit report regularly for errors. Choose the right co-applicant Usually, students heading abroad for studies may not have an income or a credit history, making it harder for them to qualify for an education loan on their own. That’s why lenders look for a financially strong co-applicant (usually a parent or guardian) to share the repayment responsibility. It reduces the lender’s risk and significantly improves the chances of loan approval. Since the co-applicant’s profile is key, lenders evaluate their income stability, repayment capacity, and credit score. Ideal co-applicants include salaried parents with consistent income. Build financial credibility early If you’re planning to study abroad, building financial credibility well in advance can make all the difference. The process begins at least 6 to 12 months before applying for a loan. Ensure your family’s income is accurately reported in tax returns and that financial records reflect stability. A track record of disciplined savings, like fixed deposits, can work in your favour. When approaching lenders, present a clear cost estimate from your university covering tuition, living expenses, travel, and insurance. The more clarity you offer, the more confidence you inspire. Compare interest rates Interest rates play a decisive role in shaping your repayment journey. Even a small difference can translate into substantial savings over the loan tenure. Education loan rates generally range from 8% to 15%, with public sector banks often offering more competitive terms than private lenders. Some institutions also offer concessional rates to female students. It’s important to compare lenders carefully and understand whether the interest rate is fixed or floating. Floating rates may change over time, impacting your EMI. Know what expenses are covered Story continues below this ad An education loan for overseas studies typically covers more than just your tuition fee. Depending on the lender, it may also cover accommodation, travel, insurance, books, and other academic expenses. Go through the loan terms closely as any gaps in coverage could leave you funding essentials out of pocket. Understand the moratorium period A moratorium period is a temporary break from making loan EMI payments on which interest still accumulates. Most lenders offer a grace period of 6 to 12 months after course completion, before EMIs begin. Some banks also allow you to pay simple interest during the moratorium, which can significantly reduce your repayment burden later. Evaluate the repayment tenure Education loans often come with repayment tenures stretching up to 15 years. A longer tenure can make EMIs more affordable, but increase overall interest outgo. If your finances allow, try repaying early but check for prepayment charges before you do. Before signing up, compare rates, read the fine print, and build a repayment strategy upfront. For your reference, here are the latest interest rates on education loans by top 10 lenders: